Joe Kenehan Center
Monday, May 05, 2003
Outrage at CEO Pay, Part 37
Voices in the mainstream media are taking up another round of handwringing over the obscene compensation packages American executives award themselves. These days this seems to happen every 6-8 months or so. Washington Post business columnist Steven Pearlstein’s take—concentrating on how shaky the market-based explanations for the continuing rise in executive pay are—is here.
Pearlstein later participated in an online forum on the topic. Several participants offered vaguely left-liberal solutions, including higher income taxes for the super-rich or mandated limits on CEO pay. Unfortunately, nobody thought to mention the real solution: labor law reform. By making it easier for American workers to join together in unions, the government could empower them to hold their leaders more accountable.
It’s not a coincidence that the explosion in CEO pay has occurred at exactly the same time the labor movement in the private sector has pretty much collapsed. Over 90 percent of Americans who work for a private corporation are not in a union.
The shady antics of American Airlines’ executives got a lot of attention a few weeks ago. I heard several commentators note that American’s executives were really just following the lead of Delta Airlines’s top corporate team, which awarded itself similarly ridiculous increases. But because Delta is largely nonunion, there wasn’t really anybody who could raise doubts about the deals at Delta.
The Virtual Sucking Sound
I was at a union conference this weekend and saw an amazing presentation by a group of union activists from Washtech, the fledging tech workers union that got its start among Microsoft permatemps.
They have been organizing around the issue of IT jobs being exported to countries with highly-skilled workers but low pay standards, like Ireland, Pakistan, and India.
During the long decline of American manufacturing, market fundamentalists would roll their eyes when anyone raised the question of the job base and insist that people who were willing to keep their skills current would always find good work.
But with large employers finding new ways to drive down pay and benefit standards for the jobs "of the future," a new hole could be blown in the American economy. (Washtech’s web site includes a leaked Powerpoint presentation from Microsoft touting the benefits of moving tech jobs offshore.)
Are the DLC's traditional solutions really going to work when Office Park Dads' jobs are just as vulnerable as a Ford assembly line worker's?